US President Donald Trump and Prime Minister Narendra Modi (File photo)

New Delhi: US President Donald Trump on Friday said that the India trade deal was on track and described his relations with the country as “fantastic”. He said India will continue to pay the 18% tariffs that was decided as part of the interim framework.Indian authorities are closely watching Trump administration’s response to the US Supreme Court decision on tariffs, with some seeing a possible room for manoeuvrer as the interim trade deal is yet to be signed.India has agreed to reduce tariffs on majority of items as part of the interim trade deal in return for the US lowering reciprocal tariffs to 18%, with sector-specific tariffs on iron and steel, copper and aluminum and auto and auto parts staying at 50%. Govt did not comment, with officials saying it was too early to gauge the ruling’s impact.

How duties changed for stakeholders

“India has not signed the agreement yet so there may be some scope for a dialogue. But we will wait and see how the US govt responds to the ruling,” an official said. A team led by India’s chief negotiator Darpan Jain is headed to Washington to finalise the legal text with US Trade Representative Jamieson Greer.The USTR is scheduled to visit Delhi to sign the interim agreement next month.Earlier Friday, commerce and industry minister Piyush Goyal had said that the agreement will be operationalised in April. On Friday, Indonesia became the latest country to sign a trade deal with the US, locking reciprocal tariffs at 19%. It joins Malaysia, Argentina, Cambodia, Guatemala, El Salvador, Bangladesh and Taiwan, which have signed trade agreements. Some American experts have suggested that the validity of the deals is under question as the Congress may step in.Govt is approaching the development with caution, given that tariffs have been a core policy tool used by the American president since returning to office last year.Trump has used ‘Plan B’ by invoking provisions under section 122 of the Trade Act of 1974 – temporary tariffs of up to 15% for balance of payments reasons – and decided to impose 10% additional tariff on all countries. Besides, Trump said he will use section 301 to order investigations against countries for unfair trade practices. The probes may take five months, he indicated, and is likely to follow the action with tariffs. The US is the largest market for Indian exports, accounting for nearly a fifth of the shipments.